If you were to start a business delivering documents, you might need to purchase cell phones, bicycles, desks, and chairs. a. These purchases are called capital investment. If you raise the funds to purchase them from others you are a saver. b. These purchases are called capital investment. If you raise the funds to purchase them from others you are a borrower. c. These purchases are called consumption. If you raise the funds to purchase them from others you are a saver. d. These purchases are called consumption. If you raise the funds to purchase them from others you are a borrower.

Answers

Answer 1

Answer:

The answer is B.

Explanation:

Capital is what is used to start a business. It is what the owner's contribution in the business. In advanced class, it is called stock or equity. Capital is usually from the owner's savings. But if this money is borrowed either from an individual or a bank, the person is a borrower while the other party is the lender.

Option A is incorrect because money raised from someone makes the person borrowing a borrower and not a saver.

Option C and D are incorrect because the items needed for the business are not consumables, they are needed for the smooth running of the business, hence they are not consumption.


Related Questions

Norris Co. has developed an improved version of its most popular product. To get this improvement to the market, will cost $48 million and will return an additional $13.5 million for 5 years in net cash flows. The firm's debt-equity ratio is .25, the cost of equity is 13 percent, the pretax cost of debt is 9 percent, and the tax rate is 30 percent. What is the net present value of this proposed project?

Answers

Answer:

NPV = $1.49  million

Explanation:

The NPV is the difference between the PV of cash inflows and the PV of cash outflows. A positive NPV implies a good investment decision and a negative figure implies the opposite.  

NPV of an investment:  

NPV = PV of Cash inflows - PV of cash outflow  

But we will need to work out the discount rate to be used for discounting the cash flows. Hence, we need to determine the cost of capital as follows:

Step 1: After-tax cost of debt

After tax cost of debt = pre-tax cost of debt × (1-tax rate rate)

                                 = 9%× (1--0.3)=6.3%

Step 2 : Weighted Average cost of capital (WACC)

WACC=( 0.25×6.3%) + (0.75× 13%) =11.325 %

Step 3:Net Present Value (NPV)

PV of cash inflow= (1- (1.11325^-5)/0.11325)× 13.5 = 49.49  million

Initial cost = $48 million

NPV = 49.49  million -  $48 million  =$1.49  million

NPV = $1.49  million

Kiley Electronics is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less than the WACC (and even negative), in which case it will be rejected.

Answers

Answer:

13.31%

Explanation:

some information is missing:

Year        Cash flows

0              −$1,100

1                  $450

2                 $470

3                 $490

the easiest way to calculate the IRR is by using a financial calculator, IRR = 13.31%

but if we don't have one at hand, the IRR is the discount rate at which a project's NPV = 0

1,100 = 450/(1 + r) + 470/(1 + r)² + 490/(1 + r)³

to simplify the formula we must use trial and error:

since we already know the real IRR, I will start with a close number like 10%

1,100 = 450/(1 + 0.1) + 470/(1 + 0.1)² + 490/(1 + 0.1)³

1,100 = 409.09 + 388.43 + 368.14

1,100 ≠ 1,165.66

since the NPV is still positive, we must increase the discount rate. following the example we can use 12%

1,100 = 450/(1 + 0.12) + 470/(1 + 0.12)² + 490/(1 + 0.12)³

1,100 = 401.79 + 374.68 + 348.77

1,100 ≠ 1,125.24

we must increase the discount rate even more to 13%

1,100 = 450/(1 + 0.13) + 470/(1 + 0.13)² + 490/(1 + 0.13)³

1,100 = 398.23 + 368.08 + 339.59

1,100 ≠ 1,105.90

we keep increasing the discount rate to 14%

1,100 = 450/(1 + 0.14) + 470/(1 + 0.14)² + 490/(1 + 0.14)³

1,100 = 394.74 + 361.65 + 330.74

1,100 ≠ 1,087.13

since now the NPV is negative, the discount rate must be between 13-14%

we continue this way until we finally reach 13.31%

The Year 1 selling expense budget for Apple Corporation is as follows:
Budgeted sales $275,000
Selling costs:
Delivery expenses $ 2,750
Commission expenses 5,500
Advertising expenses 2,500
Office expenses 1,500
Miscellaneous expenses 5,300
Total $17,550
Delivery and commission expenses vary proportionally with budgeted sales in dollars. Advertising and office expenses are fixed. Miscellaneous expenses include $2,000 of fixed costs. The rest varies with budgeted sales in dollars. The budgeted sales for Year 2 are $330,000.
What will be the value of miscellaneous expenses in the Year 2 selling expense budget?
A. $6,200
B. $4,200
C. $3,600
D. $3,960

Answers

Answer:

$5,960

Explanation:

Fixed portion of Miscellaneous expenses = $2,000

Variable portion of Miscellaneous expenses = ($5,300 - $2,000) / $275,000

= $3,300 / $275,000

= $0.012 of sales

Miscellaneous expenses in the Year 2 selling expense budget = (Budgeted sales * Variable portion) + Fixed portion

= ($330,000 * $0.012) + $2,000

=  $3,960 + $2,000

= $5,960

perline, inc., has balance sheet equity of $6.2 million.At the same time, the income statement shows net income of $948600. The company paid dividends of $493272 and has 100000 shares of stock outstanding. If the benchmark PE ratio is 26, what is the target stock price in one year?

Answers

Answer:

The target stock price in one year is $264.75

Explanation:

We first calculate the ROE as below

ROE= Earnings / Book value of Equity

ROE= $948,600 / $6,200,000

ROE= 0.153

The payout ratio is:

b=  Dividend / Net income

b = $493,272 / $948,600

b = 0.52

So the sustainable growth rate is:

g = ROE * (1-b)

g = 0.153 * (1-0.52)

g = 0.153 * 0.48

g = 0.07344

The earning in the first year are

EPS1 = $948,600 / 100,000  * (1 + 0.07344)

EPS1 = $9.486 * 1.07344

EPS1 = $10.1827

According to the benchmark PE ratio, the target stock price in one year is

Price = EPS1 * 26

Price = $10.1827 * 26

Price = $264.75

A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity is known as

Answers

Answer:

Bounded rationality.

Explanation:

This is explained to be a model that is been used in making choices between alternatives. Models of this kind brings about use of logic, analysis and objectivity always which appear over subjectivity and insight. In this particular model, approaches like Formulating of goal, decision making, identification of criteria for decision making, performing analysis etc are seen to make this model a better type of its kind. Here individuals who are seen to posses high cognitive ability are seen handling of decisions and making quality arrangements towards its actualization.

In a lot of cases, it is seen to not consider factors that cannot be quantified, such as ethical concerns or the value of altruism.

Martin Enterprises needs someone to supply it with 118,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $785,000 to install the equipment necessary to start production costs will be $415,000 per year, and your variable production costs should be $10.05 per carton. You also need an initial investment in net working capitalof $68,000.If your tax rate is 24 percent and you require a return of 12 percent on your investment, whar bid price should you submit?

Answers

Answer:

$15.66 per carton

Explanation:

118,000 cartons of machine screws

equipment cost $785,000

depreciation per year = $785,000 / 5 = $157,000

fixed manufacturing costs $415,000 per year

variable costs per carton = $10.05 x 118,000 = $1,185,900

initial investment in net working capital $68,000

tax rate 24%

discount rate 12%

price per carton?

initial investment = -$853,000

CF₁ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320

CF₂ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320

CF₃ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320

CF₄ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 = 0.76R - $1,178,320

CF₅ = [(R - $1,600,000 - $157,000) x 0.76] + $157,000 + $68,000 = 0.76R + $1,110,320

$853,000 = (0.76R - $1,178,320) / 1.12 + (0.76R - $1,178,320) / 1.12² + (0.76R - $1,178,320) / 1.12³ + (0.76R - $1,178,320) / 1.12⁴ + (0.76R + $1,110,320 ) / 1.12⁵ = 0.6786R - $1,052,071.43 + 0.6059R - $939,349.49 + 0.541R - $838,704.90 + 0.483R - $748,943.66 + 0.4312R + $630,025.39

$853,000 = 2.7397R - $4,209,094.87

$5,062,094.87 = 2.7397R

R = $5,062,094.87 / 2.7397 = $1,847,682.18

total revenue = $1,847,682.18

revenue per carton = $1,847,682.18 / 118,000 = $15.6583 = $15.66

In an emergency situation, such as a life-threatening trauma in an emergency room, a supervisor must be:_______.
a. sensitive to employees' feelings.b. an empathetic communicator.c. an apprehensive communicator.d. direct and assertive.

Answers

Answer:

d. direct and assertive.

Explanation:

In an emergency situation, such as a life-threatening trauma in an emergency room, a supervisor must be direct and assertive.

When there's an emergency situation, this ultimately implies a life and death situation which is typically characterized by having someone being in a very critical and dangerous condition. In order to be able to save such an individual or situations, it is very important and essential to have a direct and assertive supervisor who is in charge or control of the emergency situation and capable of making quick decisions that would most likely salvage the situation.

A supervisor who is assertive is confident, bold and positive about his or her instructions in any situation, which is a prerequisite quality to overcome emergencies.

One of the potential pitfalls of real options analysis is that managers may have the incentive and know-how to game the system.
a. True
b. False

Answers

Answer:

True

Explanation:

This is true and a pitfall because managers particularly those in investment businesses can take actions that benefit themselves or act based on self interests. This is because they are open to incentives and also have the know how so they can easily make changes. This is bad for real options analysis. It is an agency issue. These people act without even considering the interests of the organization or that of their employers.

"What is the payback period for a $20,000 project that is expected to return $6,000 for the first two years and $3,000 for years three through five?"

Answers

Answer:

4.67 years.

Explanation:

PB = Years before cost recovery + (Remaining cost to recover ÷ Cash flow during the year)

= 4 + ($2,000 / $3,000)

= 4.67 years.

Interest rates can be measured more accurately and quickly than reserve aggregates; hence an interest rate is preferred to the reserve aggregates as a policy instrument.

a. True
b. False

Answers

Answer:

False

Explanation:

This is false.

In reporting reserves aggregate there are lags interest rate such as the federal interest rate are quite easy to measure and easily observable. Such short term interest rate are nominal values and they do not measure the real cost of borrowing well. It does not show accurately what happens to Gross domestic product. Real interest rate equals nominal interest rate as a ratio of reduced inflation gives a representation of true cost of borrowing.

We cannot say with certainty that interests rate is a better policy instrument based on the ground of measurability.

How many years will it take for your money to double if fees are 1.5% per year (not uncommon in the mutual fund industry)?

Answers

Answer:

Doubling time: 20 years.

Explanation:

Use the following information and the indirect method to calculate the net cash provided or used by operating activities:
Net income $ 86,800
Depreciation expense 13,500
Gain on sale of land 6,800
Increase in merchandise inventory 3,550
Increase in accounts payable 7,650
A) $97,600.
B) $15,850.
C) $31,400.
D) $16,850.
E) $38,200

Answers

Answer:

A) $97,600

Explanation:

Calculation for the net cash provided or used by operating activities

OPERATING ACTIVITIES

Net Income $86,800

Depreciation Expense 13,500

Gain on Sale of Land (6,800)

Increase in Merchnadize Inventory (3,550)

Increase in Accounts Payable 7,650

Net Cash provided by Operations $97,600

Therefore the net cash provided or used by operating activities will be $97,600

A company stocks an SKU with a weekly demand of 600 units and a lead time of 4 weeks. There are 52 weeks in a year. Management will tolerate 1 stock out per year. If sigma for the lead time is 100 and the order quantity is 2500 units, what is:

Answers

A company stocks an SKU with a weekly demand of 600 units and a lead time of 4 weeks. There are 52 weeks in a year. Management will tolerate 1 stock out per year. If sigma for the lead time is 100 and the order quantity is 2500 units, what is:  the safety stock, the average inventory, and the order point?

Answer:

The safety stock = 142 units

The average inventory = 1392 units

The order point = 2542 units

Explanation:

Given that:

the weekly demand = 600 units

lead time = 4 weeks

sigma for the lead time (i.e the standard deviation [tex]\sigma[/tex] ) = 100 units

Order quantity = 2500 units

The objective is to calculate :

the safety stock, the average inventory, and the order point?

To start with the number of order per year.

The number of order per year = Annual demand/Order quantity

The number of order per year =  (Weekly demand × 52)/ Order quantity

The number of order per year =  (600 × 52)/2500

The number of order per year =  31200/2500

The number of order per year = 12.48 times /year

Also, the service level for the safety factor = (Number of order per year - 1)/ number of order per year

the service level for the safety factor = ( 12.48 - 1)/12.48

the service level for the safety factor = 11.48/12.48

the service level for the safety factor = 0.9199

the service level for the safety factor = 91.99%

∴ the safety factor at 91.99% service level = (safety factor at (90% +94%))÷2

the safety factor at 91.99% service level = (1.28 +1.56) ÷2

the safety factor at 91.99% service level = 2.84 ÷2

the safety factor at 91.99% service level = 1.42

Now,

the safety stock = 100 × safety factor at 91.99% service level

the safety stock = 100 × 1.42

the safety stock = 142 units

The order point = safety factor +  demand during lead time

where;

The demand during lead time = weekly demand × 4

The demand during lead time = 600  × 4

The demand during lead time = 2400 units

The order point = safety factor +  demand during lead time

The order point = 142 +  2400

The order point = 2542 units

Finally,

The average inventory = (order quantity ÷ 2) + safety stock

The average inventory = (2500 ÷ 2) + 142

The average inventory =1250 +142

The average inventory = 1392 units

Long-term debt ratio 0.3
Times interest earned 10.0
Current ratio 1.2
Quick ratio 1.0
Cash ratio 0.4
Inventory turnover 3.0
Average collection period 73 days

Use the above information from the tables to work out the following missing entries, and then calculate the company’s return on equity.

Net sales _____$
Cost of goods sold
Selling, general, and administrative expenses 20.00
Depreciation 30.00
Earnings before interest and taxes (EBIT) _____$
Interest expense
Income before tax _____$
Tax (35% of income before tax)
Net income _____$

Answers

12$ 18$ 35$ 14$ I think

A firm issues $300 million in straight bonds at an original issue discount of 0.50% and a coupon rate of 7%. The firm pays fees of 2.0% on the face value of the bonds. The net amount of funds that the debt issue will provide for the firm is closest to which of the following?
A)$248,625,000
B)$263,250,000
C)$277,875,000
D)$292,500,000

Answers

Answer: $292,500,000

Explanation:

The following information can be derived from the question:

Issued bond = $300

Issue discount = 0.50%

Coupon rate = 7%.

Fees paid = 2.0%

The net amount of funds that the debt issue will provide for the firm will be:

= Issued bond price - Discount - Fees paid

= $300m - ($300m × 0.50%) - ($300m × 2.0%)

= $300m - $1.5m - $6m

= $300m - $7.5m

= $292.5 Million

Consider the following information on large-company stocks for a period of years. Series Arithmetic Mean Large-company stocks 12.1 % Inflation 3.4A. What was the arithmetic average annual return on large-company stocks in nominal terms?
B. What was the arithmetic average annual return on large-company stocks in real terms?

Answers

Answer:

a. 12.1 %

b. 8.41%

Explanation:

a. The arithmetic average annual return on large-company stocks in nominal terms is already stated in the table as 12.1%.

This is because it was not yet adjusted for inflation making it nominal.

b. The arithmetic average annual return on large-company stocks in real terms can be expressed by;

Real Return = [(1 + Nominal rate) / (1 + Inflation rate)] - 1

= (( 1 + 12.1%) / ( 1 + 3.4%)) - 1

= (1.121/1.034) - 1

= 1.0841 - 1

= 8.41%

Nemesis, Inc., has 215,000 shares of stock outstanding. Each share is worth $81, so the company's market value of equity is $17,415,000. Suppose the firm issues 48,000 new shares at the following prices: $81, $75, and $69. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share? (Leave no cells blank; if there is no effect select "No change" from the dropdown and enter "O". Round your answers to 2 decimal places, e.g., 32.16.)
Price Ex-Rights Amount $ Effect per share
per share
per share
No change
Price drops by
Price drops by

Answers

Answer:

$81, $75, and $69

a. Market value of existing shares = 215000 * $81 = $17415000

   Value of New shares issued = 48000 * $81 =        $3888000

                                                                                     $21,303,000

Price after issue of new shares = 21,303,000 / (215000 + 48000)

= 21,303,000 / 263,000

= $81

Conclusion: No changes ($0 per share

b. Market value of existing shares = 215000 * $81 = $17415000

   Value of New shares issued = 48000 * $75 =        $3600000

                                                                                     $21015000

Price after issue of new shares = 21015000 / (215000 + 48000)

= 21,015,000  / 263,000

= $79.90

Conclusion: There is a decrease in amount (81 - 79.90) = $1.10 per share

c. Market value of existing shares = 215000 * $81 = $17415000

   Value of New shares issued = 48000 * $69 =        $3312000

                                                                                     $20,727,000

Price after issue of new shares = 20,727,000 / (215000 + 48000)

= 20,727,000 / 263,000

= $78.81

Conclusion: There is a decrease in amount (81 - 78.81) = $2.19 Per share

After reading it write about whether or not you agree with the academic economic consensus that independent officials running the Federal Reserve are able to properly balance their dual mandate in a fair and balanced fashion with the needs of workers in one hand and the financial industry on the other. If you agree with the consensus view explain your reasons; or if you disagree and think that the officials are biased in favor of the financial industry explain your reasoning with some possible solutions to the problem. Write at least two paragraphs articulating your views.

Answers

Answer:

The Federal Reserve has been at times biased in favor of the financial industry, because they have often put inflation targeting above the need to reduce unemployment when executing monetary policy. Besides, the financial industry has often been rescued by massive loans from the Fed.

However, the Federal Reserve has also acted in favor of reducing unemployment, specially during recessions, by expanding the money supply through a policy known as quantitative easing.

In conclusion, we can say that the Fed tends to be biased in favor of the financial industry, but not at all times.

Schwab’s customers can assemble their own investment portfolios with its mutual fund evaluator tool, an example of

Answers

Answer:

A choiceboard.

Explanation:

This is generally described to be a graphical view or a teaching pattern where a tutor allows the said students to use these graphical knowledge to learn and understand a concept been impacted to them at their own pace. This choiceboard is been set up for so many reasons which may include; the encouraging of communication by giving the children means to request a particular object, also giving children certain visual prompt to say the correct words, it is also seen to streamline the selection of choice down there which could be a selection of choices.

An assembly line with 17 tasks is to be balanced. The longest task is 2.4 minutes, and the total time for all tasks is 18 minutes. The line will operate for 450 minutes per day.Required:a. What are the minimum and maximum cycle times? b. What range of daily output is theoretically possible for the line? c. What is the minimum number of workstations needed if the maximum output rate is to be sought?d. What cycle time will provide an output rate of 125 units per day?

Answers

Answer

a)Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes

b)=187.5 units per day and 25 units per day

c) 8 workstation

d)2.6min/cycle

Explanation:

Given:

output rate = 125 units per day

Operating time= 450 minutes per day

What are the minimum and maximum cycle times?

Minimum Cycle time = duration of the longest task

Therefore,Minimum cycle time = 2.4 minutes

Maximum cycle time = addition of the task

Maximum Cycle Time = 18 minutes

Therefore, Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes

B)B)What range of daily output is theoretically possible for the line?

Range of daily output = Operating time / minimum Cycle time

At 2.4 minutes Cycletime

= 450/2.4

=187.5 units per day

At Cycle time 18 Minutes

= 450/18

Cycle time 18 minutes = 25 units per day

C)What is the minimum number of workstations needed if the maximum output rate is to be sought?

number of workstation=(D× summation of all task)/Operating time

number of workstation=(187.5*18)/450

= 7.5= 8 workstation

D)What cycle time will provide an output rate of 125 units per day?

cycle time= Operating time/output rate

=450/125

= 2.6min/cycle

Computer Corp. just paid a dividend of $0.75. If the firm's growth in dividends is expected to remain at a flat 3 percent forever, then what is the cost of equity capital for Computer Corp. if the price of its common shares is currently $12.00

Answers

Answer:

9.44%

Explanation:

According to the given situation, the computation of the cost of equity capital is shown below:-

Cost of equity capital = Dividend × (1 + Expected rate of return) ÷ Common shares + Expected rate of return

Now, we will put the values into the above formula.

= ($0.75 × (1.03) ÷ $12) + 0.03

= 0.0944

or

= 9.44%

Therefore for computing the cost of equity we simply applied the above formula.

Kemp Corporation manufactures a variety of parts for use in its product. The company has always produced all of the necessary parts for its product, including all of the electronic circuits. The company sells 18,000 units of its product per year. An outside supplier has offered to sell electronic circuits to the company for a cost of $40 per unit. To evaluate this offer, the company has gathered the following information relating to its own cost of producing the electronic circuits internally: Per Unit 18,000 Units per Year Direct materials $ 18 $ 324,000 Direct labor 9 162,000 Variable manufacturing overhead 2 36,000 Fixed manufacturing overhead, traceable 9 * 162,000 Fixed manufacturing overhead, allocated 12 216,000 Total cost $ 50 $ 900,000 *One-third supervisory salary; two-thirds depreciation of special equipment (no resale value). Suppose that if the electronic circuits were purchased, the division supervisor position could be eliminated. Fixed manufacturing overhead will be allocated to other products made by the company. Also, the company could use the freed production capacity to launch a new product. The segment margin of the new product would be $180,000 per year. Given this new assumption, how much would be the financial advantage of buying 18,000 electronic circuits from the outside supplier

Answers

Answer:

financial advantage of purchasing from outside vendor = $36,000

Explanation:

outside vendor offers 18,000 units at $40 per unit = $720,000

current production costs (for 18,000 units):

Direct materials $324,000 Direct labor $162,000 Variable manufacturing overhead $36,000 Fixed manufacturing overhead, traceable $162,000 ($54,000 avoidable)Fixed manufacturing overhead, allocated $216,000 (not avoidable)Total cost $900,000

total avoidable costs = $576,000

additional revenue generated by freed facilities = $180,000

financial advantage of purchasing from outside vendor = ($576,000 + $180,000) - $720,000 = $36,000

Assume Mrs. Kinsley has filed a suit against Kitchen Essential Products Inc. for the injuries that she sustained under the theory of strict product liability. Can Mrs. Kinsley prevail in a cause of action against Kitchen Essential Products Inc. under strict product liability.

Answers

Answer:

"strict liability" says that a defendant seller, distributor or manufacturer of a defective product can be liable to anyone injured by that product, regardless of whether the defendant did everything possible to make sure the defect never happened.

In the case of Mrs Kinsley against Kitchen Essential Products inc. for the injury she sustained, she will be able to prevail in a cause action against the company under strict product liability. Because, the accident happened as a result of the faulty product which she purchased from the Kitchen Essential Product Inc company.

Explanation:

"Net income for the period was $200,000. The retained earnings account had a beginning balance of $25,000. If the company paid dividends of $20,000 during the year, what is the ending balance in retained earnings?"

Answers

Answer:

Retained earning balance at the end would be = $205,000

Explanation:

Retained earnings at the end = Retained earning at the beginning + Net income - Dividend paid

The net income would increase the balance of the retained earnings hence it is added to it.

The Dividend paid would be a cash outflow which would reduce the balance of the retained earnings, hence it is deducted from it.

So applying this to the question, we have

Retained earning balance at the end would be:

25,000 + 200,000 - 20,000 = $205,000

Retained earning balance at the end would be = $205,000

Problem 24-01 Liquidation Southwestern Wear Inc. has the following balance sheet: Current assets $1,875,000 Accounts payable $375,000 Fixed assets 1,875,000 Notes payable 750,000 Subordinated debentures 750,000 Total debt $1,875,000 Common equity 1,875,000 Total assets $3,750,000 Total liabilities and equity $3,750,000 The trustee's costs total $276,250, and the firm has no accrued taxes or wages. Southwestern has no unfunded pension liabilities. The debentures are subordinated only to the notes payable. If the firm goes bankrupt and liquidates, how much will each class of investors receive if a total of $4 million is received from sale of the assets? Distribution of proceeds on liquidation: 1. Proceeds from sale of assets $ 2. First mortgage, paid from sale of assets $ 3. Fees and expenses of administration of bankruptcy $ 4. Wages due workers earned within 3 months prior to filing of bankruptcy petition $ 5. Taxes $ 6. Unfunded pension liabilities $ 7. Available to general creditors $ Distribution to general creditors: Claims of General Creditors Claim (1) Application of 100% Distribution (2) After Subordination Adjustment (3) Percentage of Original Claims Received (4) Notes payable $ $ $ % Accounts payable $ $ $ % Subordinated debentures $ $ $ % Total $ $ $ The remaining $ will go to the common stockholders.

Answers

Answer:

1. Proceeds from sale of assets $ 4,000,000

2. First mortgage, paid from sale of assets 0.00

3. Fees and expenses of administration of bankruptcy 276,250

4. Wages due workers earned within 3 months prior to filing of bankruptcy petition 0.00

5. Taxes 0.0

6. Unfunded pension liabilities 0.00

7. Available to general creditors $3,723,750

Distribution to general creditors

Claim (1) =$1,875,000

Application of 100% Distribution(2)=$1,875,000

After Subordination Adjustment

(3)=$1,875,000

Percentage of Original Claims Received

(4)=$1,875,000

Explanation:

Calculation for how much will each class of investors receive if a total of $4 million is received from sale of the assets

1. Proceeds from sale of assets $ 4,000,000

2. First mortgage, paid from sale of assets 0.00

3. Fees and expenses of administration of bankruptcy 276,250

4. Wages due workers earned within 3 months prior to filing of bankruptcy petition 0.00

5. Taxes 0.00

6. Unfunded pension liabilities 0.00

7. Available to general creditors $3,723,750

Distribution to general creditors:

Claims of General Creditors

Notes payable

Claim (1) 750,000

Application of 100% Distribution

(2) 750,000

After Subordination Adjustment

(3) 750,000

Percentage of Original Claims Received

(4) 100%

Accounts payable

Claim (1) 375,000

Application of 100% Distribution

(2) 375,000

After Subordination Adjustment

(3) 375,000

Percentage of Original Claims Received

(4) 100%

Subordinated debentures

Claim (1) 750,000

Application of 100% Distribution

(2) 750,000

After Subordination Adjustment

(3) 750,000

Percentage of Original Claims Received

(4) 100%

TOTAL

Claim (1) $750,000+ 375,000+750,000=$1,875,000

Application of 100% Distribution

(2)$750,000+ 375,000+750,000=$1,875,000

After Subordination Adjustment

(3)$750,000+ 375,000+750,000=$1,875,000

Percentage of Original Claims Received

(4)$750,000+ 375,000+750,000=$1,875,000

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $7.9 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facilities elsewhere. The land would net $10.7 million if it were sold today. The company now wants to build its new manufacturing plant on this land; the plant will cost $21.9 million to build, and the site requires $940,000 worth of grading before it is suitable for construction.

Required:
What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?

Answers

Answer:

$33,540,000

Explanation:

initial investment:

opportunity cost of land (resale price of land) = $10,700,000building cost of the facilities = $21,900,000other expenses related to the site (grading) = $940,000total $33,540,000

The purchase cost of the land is considered a sunk costs, since it is not relevant now. What is relevant is the price at which the land could be sold at the moment of starting the project.

The NYSE Specialist (DMM) and Floor Trader system is the model for trading used by which of the following markets?

I NASDAQ
II AMEX (NYSE American)
III PHLX
IV BATS

a. I and III
b. I and IV
c. II and III
d. II and IV

Answers

Answer:

c. II and III

Explanation:

The New York Stock Exchange, NYSE Specialist (DMM) and Floor Trader system is the model for trading used by American Stock Exchange, AMEX (NYSE American) and Philadelphia Stock Exchange (PHLX).

However, National Association of Securities Dealers Automated Quotations (NASDAQ) isn't modeled after the NYSE Specialist (DMM) and Floor Trader system, rather it is based on an all electronic market. Also, Better Alternative Trading System (BATS) started as an Electronic Communications Network (ECN) and as such is typically an all electronic market, which has transformed magnificently into an exchange according to the Securities and Exchange Commission (SEC).

Hence, the American Stock Exchange, AMEX (NYSE American) and Philadelphia Stock Exchange (PHLX) uses a designated market maker (DMM) and Floor Trader system just like the New York Stock Exchange as their primary market maker.

_________________ agreements are one way to achieve the goal of swapping skills and technologies that each company in a strategic alliance covets, and ensuring a chance for equitable gain.
A. Join venture
B. Sharing
C. Cross-licensing
D. Learning
E. Contractual

Answers

Answer:

it should be C. cross-licensing

Potential output: $8 trillion Actual output: $6 trillion Actual Deficit: $ 400 billion Tax Rate: 15% What is the structural deficit in 2010

Answers

Answer:

The structural budget in 2010 is $100 billion

Explanation:

Actual deficit = Government spending - Tax Revenue Collection  

i.e Actual deficit = G-T

T = (Tax rate) (Actual output)

$400 billion = G - (0.15)($6000 billion)

$400 billion = G - $900 billion

G =  $400 billion + $900 billion

G =  $1300 billion

Thus, Government spending is $1300 billion

Structural deficit = G - T'

T' = (Tax rate)(Potential output)

T' = (0.15)(8000 billion)

T' = $1200 billion

Structural deficit = G - T'

Structural deficit = $1300 billion - $1200 billion

Structural deficit = $100 billion

Thus, the structural budget in 2010 is $100 billion

Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 300 Revenue ($430.00q) $129,000 Expenses: Wages and salaries ($11,300 + $128.00q) 49,700 Supplies ($4.00q) 1,200 Equipment rental ($2,400 + $25.00q) 9,900 Insurance ($3,900) 3,900 Miscellaneous ($510 + $1.44q) 942 Total expense 65,642 Net operating income $63,358 During May, the company’s actual activity was 290 diving-hours. Complete the following flexible budget for that level of activity.Revenue Expenses: Wages and salaries Supplies Equipment rental Insurance Miscellaneous Total expense Net operating income

Answers

Answer:

Revenue $124,700

Expenses:

Wages and salaries 48,420

Supplies 1,160

Equipment rental 9,650

Insurance 3,900

Miscellaneous 928

Total expense$64,058

Net Operating income $60,642

Explanation:

Calculation to Complete the flexible budget for that level of activity

FLEXIBLE BUDGET

Actual diving hours 290

Revenue (290*$430) $124,700

Expenses:

Wages and salaries (11,300+290*128) 48,420

Supplies (290*4) 1,160

Equipment rental (2,400+290*25) 9,650

Insurance 3,900

Miscellaneous (510+290*1.44) 928

Total expense $64,058

Net Operating income $60,642

($124,700-$64,058)

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